Corker Asks Federal Banking Regulators if Any Single Financial Institution Poses Systemic Risk to US Economy

Press Release

Following a Senate Banking Committee hearing to examine the stability of the U.S. financial system, U.S. Senator Bob Corker, R-Tenn., sent a letter to federal banking regulators asking if the U.S. economy would be threatened by the failure of any single financial institution. Recipients of the letter, Undersecretary of the Treasury Mary J. Miller and Federal Reserve Governor Daniel K. Tarullo, were unable to answer this question posed by Corker during today's hearing.

"My question was: "Are there any individual financial institutions whose failure would pose a systemic risk to the United States?' I was disappointed in your answer, which seemed to indicate that you do not know if there are institutions whose failure might threaten the stability of our country," wrote Corker in his letter to Miller and Tarullo. "[W]ould you please let me know if there are currently any financial institutions so large or so complex that their failure would threaten the financial stability of the United States? If so, how do you plan to resolve this issue?"

Full text of the letter is included below.

Dear Undersecretary Miller and Governor Tarullo:

As leading members of the Financial Stability Oversight Council (FSOC), you are tasked by Dodd-Frank "to identify" risks to the financial stability of the United States. In addition, the FSOC is told to "respond" to these threats. Today, however, at a Senate Banking Committee hearing you each were unable to answer a simple question presumably related to the central purpose of the Council. My question was: "Are there any individual financial institutions whose failure would pose a systemic risk to the United States?"

I was disappointed in your answer, which seemed to indicate that you do not know if there are institutions whose failure might threaten the stability of our country. Frankly, it made me question the value of the FSOC. But I'd like for us to attempt to resolve this issue now.

To that end, would you please let me know if there are currently any financial institutions so large or so complex that their failure would threaten the financial stability of the United States? If so, how do you plan to resolve this issue?

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